Consumers overestimating cost of insurance
A new survey has provided at least some explanation for Australia's continuing underinsurance problem: men and women are quite simply overestimating the cost of an insurance premium.
The Lifebroker Life Insurance Survey, released this week, suggested men overestimated the annual premium of life insurance by 49 per cent while women overestimated it by a whopping 65 per cent.
Lifebroker managing director Chris Eade said it was this overestimation that was dissuading people from buying insurance, with 36 per cent of survey respondents stating the perceived expense was a major factor in their not having coverage.
"Contrary to many Australians' perceptions, life insurance premiums actually cost about the same as home and car insurance premiums, and less than health insurance premiums," he said.
Eade claimed a number of factors were contributing to the overestimation of premiums, including buyers not shopping around enough and life cover typically being sold through face-to-face contact.
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
